Tag: LME

Additional attacks on commercial shipping, renewed US military operations and a resumed naval blockade coincided with aluminum prices recovering from early July lows.

Aluminum prices retreated as markets priced a return to Middle East stability, but shipping attacks, military strikes and LME indicators suggest that assumption may have outpaced events.

The recent retreat in aluminum prices has been a “head scratcher” as the Iran war continues to disrupt output from an important production region.

LME aluminum market participants broadly reduced long and short positions during June as prices retreated, although longer-term participation trends remained relatively unchanged.

LME aluminum prices, prompt premiums and the US Midwest Premium have moved lower in June, while exchange inventories continue to decline and remain near five-year lows.

LME Clear increased member renminbi collateral limits, shortened collateral notice periods and approved Hong Kong warrants for collateral use.

Going into this week, focus will remain on US equity markets as investors wait to see whether Friday's selloff will intensify, in which case we could see knock-on price declines in a number of other complexes—including base and precious metals.

Commercial participation in LME aluminum declined over the past year even as prices increased, inventories tightened and financial market activity expanded.

Crude oil prices retraced late last week on growing optimism about the Iran war. All this sounds promising. But our sense is this is going to be an intricate sequencing game. And it runs the risk of unraveling if one side or the other seeks to prioritize its concessions over those made to the other. We will have to see what happens.

We had another very sloppy week in the US equity markets, although commodities fared better. All three major equity indices are now in correction territory (down 10% or more from their highs) on account of both the Iran war and the rising interest rates the conflict is generating.